Surprise Turnaround Was Boosted by Exports of Manufactured Goods

After two consecutive months of decline, Malaysia’s exports rebounded by 1.1% yoy in Apr (-0.5% in Mar and -5.3% in Feb), above market expectations of a 2.1% decline. Higher exports of manufactured goods (2.7% yoy in Apr vs. 1.5% in Mar), provided some offset for the continued contractions in exports of mining and agriculture goods, which declined by 1.5% and 9.3%, respectively in Apr (down 7.4% and 10.4%, respectively in Mar). In the manufactured goods clusters, exports of electrical and electronic (E&E) products rebounded to register a positive growth of 3.9% yoy in Apr following a contraction of 1.9% in March. This was driven by higher demand for electrical apparatus (3.4%) and thermionic valves and tubes and photocells (6.9%), while demand for telecommunications equipment, parts and accessories held steady at 2.5%. Other exports of manufactured goods, which increased in April, were optical and scientific equipment (19.5%), machinery and appliances (0.8%), chemical and chemical products (3.9) and refined petroleum products (11.6%).

Meanwhile, softer demand for mining goods continued due to lower exports of crude petroleum, which fell by double-digits for the third consecutive month by 34.6% yoy in April (-33.5% in March) amid lower volumes. However, exports of liquefied natural gas (LNG) posted its strongest growth in three months of 26.3% yoy in April (17.2% in March), led by higher volume and Average Unit Value (AUV). As for exports of agriculture goods, this cluster was dragged down by lower exports of palm oil and palm oil-based products; palm oil declined by 17.3% driven by lower volume and AUV.

Higher Exports to ASEAN, US and Japan in April

Malaysia’s exports to ASEAN increased for the second straight month to 7.2% yoy (1.3% in March), its strongest yoy growth since December 2018, bolstered by higher exports of E&E products, petroleum products, iron and steel products, petroleum condensates and other petroleum oil and machinery, equipment and parts. Exports to the US rebounded to 3.1% yoy in April (-3.6% in March), following two consecutive months of decline supported by higher demand for E&E products, optical and scientific equipment, manufactures of metal, processed food and rubber products.

Exports to Japan also recovered to 7.7% yoy (-11.3% in March) after five straight months of contraction supported mainly by higher exports of LNG. However, Malaysia’s exports to China fell by 6.9% in April after registering a strong doubledigit growth of 11.8% in March led by lower demand for E&E products, petroleum products and metalliferous ores and metal scrap.

Source: Affin Hwang Research - 4 Jun 2019